Following Thursday’s American Airlines earnings call, senior management held a company all-hands “State Of The Airline” address. Over 4,000 employees tuned in live to the presentation and question and answer session, and a recording was placed online. (View From The Wing reviewed a recording of the event.)
After talking through the news around his own compensation, CEO Robert Isom laid out where things stand with the company’s offer to flight attendants. This proved to be setting up the most dramatic moment of the event, so I want to offer an extended quotation where he laid out that they’re increasing their contract offer based on Delta’s recent 5% pay increase announcement.
I want to pay them at the best in the industry. And right now every offer that we put on the table for our pilots, for our dispatchers, for our agents, has been consistent with that philosophy.
And during those negotiations in which we were ultimately able to reach really nice satisfactory agreements, there were changes that happened in the marketplace, where our offer was such that it was leading but then somebody topped it. And in every one of those cases we went and adjusted our offer so that we were consistent with that philosophy.
We are using that absolute same philosophy with our flight attendants. And we have to – we have to be fair across the entire company, we have to be consistent with what we do.
And so I’ve been pleased with having an industry-leading offer on the table. The marketplace has changed. It changed when Delta put in place a new pay structure. Now, their pay structure’s not contractual. They don’t have to sign on it. And they aren’t held by the work rules that they’ve established.
But I’m willing to sign up for that, and I’m also willing to commit – the company is willing to commit – that we will match that. There’s still a lot to do. We can’t negotiate here. But I want everybody to understand that we will live by our commitment.
And that commitment as I know today will result in 25% pay increase day of signing, and that’s made up of 17% increase in wages, and another 8% that will represent boarding pay. And it also includes 401k increase from 5.5 to 9%, and profit sharing increases.
Isom talks about Delta’s compensation, and Delta had been the clear leader. But their increase also follows a new contract at Southwest. He doesn’t mention Southwest – where flight attendants didn’t just get a big raise but also retro pay to make flight attendants whole from the time since they’d last had a new contract.
American’s flight attendants want more pay and they want retro pay also – the raises they would have gotten if they’d received a new contract four years ago. Delta, for what it’s worth, says that their pay is still as high or greater than Southwest’s under certain conditions (such as 80 hours of flying per month).
During question and answer time, flight attendants union head Julie Hedrick asked employees in the room whether any of them had gone 5 years without a raise? And she said that the new industry standard is Southwest Airlines – and that Isom’s word for an industry-leading contract means surpassing Southwest. The board’s analysis for Isom’s compensation includes Southwest as one of his comps.
Isom responded that Southwest has a very different contract – work rules, network, and that take home pay of a Southwest flight attendant isn’t higher than at Delta.
When Julie Hedrick pressed Isom to instruct his team to include Southwest Airlines in their economic analysis, he responded “I’m not going to tell you I’m going to do something that I won’t do.” And he said he wouldn’t engage in “cherry picking.” That’s when Julie Hedrick walked:
Pres Hedrick to AA CEO Isom: “@AmericanAir Flight Attendants are ready to #strike. If you want to push it any further, push it. We are ready.” #1u #corporategreed pic.twitter.com/njHYNTSJNP
— Association of Professional Flight Attendants (@APFAunity) April 25, 2024
Isom responded that of course negotiations take into account Southwest. They need to get back to the table and get a contract done quickly, a strike won’t get a contract done, it has to be done through negotiations. And finally he reiterated the flight attendants deserve compensation increases, it’s been too long, and the team has to come together. The rest of the room full of employees applauded.
Flight attendant leverage here is a strike. They need the National Mediation Board’s permission to do that.
- As we approach the election, that becomes harder. A majority of the board was appointed by the President, and a major airline strike hurts him politically (but siding against labor hurts him with his base). The best thing for the President’s re-election is either a contact or delay until after November 5.
- American increasing their economic offer makes it more difficult for the National Mediation Board to conclude that negotiations are at an impasse which is the standard for releasing the parties into a 30 day ‘cooling off period’ before a strike.
- Flight attendants can’t manage a protracted strike, without pay. The union lacks the resources to fund employees with significant strike pay. Flight attendants don’t generally have the same resources as work groups like pilots in being able to funds themselves in the interim. That’s why the union has talked about targeted specific flights on specific days, so that most flight attendants keep working most of the time (and getting paid).
Cabin crew actually need a deal quickly, and probably benefit from one more than the company. While no new contract is in place, American is saving money – still paying flight attendant wages last adjusted in 2019. And there’s been over 20% inflation eroding their wage value since then. First and second year flight attendants based in Boston qualify for food stamps and a new contract fixes that.
Any deal ultimately looks something like Delta’s wages and boarding pay. The flight attendants union says they want more than this, but American isn’t in a position to pay more. What’s really changed is Southwest offering their cabin crew retro pay – which can be five figure payouts for some crewmembers.
There’s a reason that Isom talks about matching Delta and why he mentioned Delta’s recent 5% raise on the airline’s earnings call. He doesn’t really want to talk about Southwest. However it’s going to be hard to reach a deal without a meaningful signing bonus. In the meantime, the most junior flight attendants are the ones that suffer most – a function of the way that the union negotiates contracts to distribute pay disproportionately to its more senior members.
AA will go bankrupt once again. I feel for the economic pain FAs experience but I, as an always first class paying passenger, should not have to bear the brunt of the poor service and poor attitude of AA FAs. The one time a year or so ago when my wife got service above and beyond from one of the front cabin FAs, I gave her a $50 bill as we were about to exit the door. She was shocked and I was glad we did it. Of course, I see no way AA’s CEO is worth that huge pay package you described earlier…absurd!
America Airlines has a dysfunctional Flight Attendants union. A small number of the Flight Attendants actually voted to authorize the strike while a few voted against it and the majority did not vote. If they strike, they will have a real problem.
Does anyone know/speculate as to how soon a strike might be called if it is voted to do so?
A true leader would offer a one time give back of 90% of this years income to a bonus pool for FAs. That should provide a $900+ bonus per FA if my math is correct.
It would be a gutsy call that would set expectations and get everyone rowing together and end the food fight.
Isom is an inept weasel but the FA union isn’t doing themselves any favors here either. FA’s should just take the Delta match and use that as a baseline in future talks. Instead, as the period without a raise keeps growing they keep asking for more, which becomes less realistic all the time.
Accepting Delta’s pay scale could be acceptable as long as there is a provision that should Delta raise their FAs pay going forward that AA would match it. Oh yeah, and retro pay.
The biggest issue with the APFA is they think they should be paid the same as pilots. Take the new delta rates, or the new SWA rates and move on. Or quit, since the kids are living on food stamps.
These comments on this thread are laughable at best . Obviously you guys know nothing about what we’re going through as FA’s . Or are not reading what Gary posted . The union and its members voted 99% to strike . Someone on here said something to the fact that only the majority did not vote. That was for new u up leadership vote not the strike vote . Get your facts straight . And someone else replied that we needed to take either deltas or sw pay rates and move on . Not wanting pilot pay rates . wtf ? We never asked for pilot pay rates . We are not pilots . We are asking for SW be pay rates which now are the top of the Industry . Higher than delta . Isom does not want to include sw pay compensation package for AA FA ‘s because he says that SW is a different airline than AA since they only fly one fleet type and do not fly long haul intl routes.So we cannot include them as a match for AA’s compensation. Yet when figuring out his compensation in his 2023 proxy filing . The company included UA,DL, and SW ceo compensation to figure out Isoms compensation in which he is now the highest paid CEO at $31 million . No Sir . Thats not the way it works . You can’t have it one way for you and a other way for your employees just because it doesn’t work for you .
A big part of the reason why AA FAs won’t match DL FAs even w/ the same terms is the profit sharing that DL FAs get.
WN FAs aren’t getting the level of profit sharing they once got.
And Delta didn’t have to pay retro because it went for a far shorter period of time in giving raises.
Large retro now increases taxes over smaller raises that were given over the period when airlines are agreeing to retro.
And AA can’t afford these increased pay rates. It is precisely because DL has been so much more profitable than anyone else in the industry that it is slowly squeezing its competitors with higher labor costs.
Discontented workers at other airlines only help DL.
I don’t know of another time in airline history when high pay has been used as a competitive weapon.
Think service will improve if they get what they want?
If i had a lazy, unmotivated and underperforming employee, do you think that I’d give them a raise that exceeds my competitors? No. I wouldn’t.
And please let us handle our business as far as it goes on how we feel we should get paid . No one’s going into your offices or your place of work telling you what you should or should not make in your careers . It’s been since 2019 since we haven’t got a raise . We are not asking for a lot here . Just what we deserve . IfI som feels he deserves $31 million a year pay . Then give your employees what they feel they deserve based on the new industry compensation which was set by SW airlines last week . Which will pay their top FA’s over $90 an hr . And a retroactive pay lumps sum which will cover pay lost since their last pay raise was due in 2019 .
How much does the bureaucracy of American FA union cost? It is obvious it has not gained them anything. With the overall feeling of customers that American FA are the worst in the industry it is very difficult for the average customer to be supportive of their demands.
Every FA on here telling it’s highest paying customers to “stay out of their workplace” and “your not getting all the details” and blah blah needs to also start speaking facts. Robert Isom DID NOT MAKE $31 MILLION A YEAR. Ever. And he never will. So be honest about that. Also, your Union and your insane communal GREED has gotten you all where your at. There have been numerous great offers made. Y’all think anyone, and I mean ANYONE in any other industry is getting the raises Y’all are being offered? Nope. Blame your Union and it’s officers. Blame your senior members. And wake up. The flying public, aadvantage members, and even your own fellow employees are not on your side. Y’all have protected bad FA’S for too long, been on “quiet strike” (not serving pre departure bev s, being on your phone for hours, leaving trash on trays for hours, and the only time they are “nice” is when they are hawking credit cards. Gimme a break. Take the 25% freaking raise WITH BOARDING PAY and call it a day. Your own union hasn’t saved for a rainy day, Y’all literally can’t strike. It’s an election year. Look what your Union Supporter, “Scranton Joe” Biden did to the rail workers THAT ACTUALLY DO REAL WORK: he didn’t let them strike. Wake the heck up and smell the roses. Your not striking.
We are the last to be compensated when we are the face and up front with passengers greeting and taking care and making sure everyone is comfortable on the flights meanwhile we are not given adequate tools to work – doing all the grunt work and not being compensated for years – – It’s hard to go to work and feel taken advance of year after year – we we were told at the merger we’re gonna be the standard and we’re taking the best of both airlines yet they took the best for management- took out vacation and put everyone back on reserve which is a huge pay cut 3 months a year –
Kevin Rivera, great comments. I couldn’t have said it better myself. It just slays me that all these people want to have a say in our wages and contract. I don’t give two hoots what any of them do for a living or what they make. I don’t understand why they are so interested in ours. As for the Pilot, give me a break. Not one word has been said that we want your wages but we do want your per diem. You don’t think I deserve to get $3.40 an hour on my international flights to eat the same as you?
I’m not going to defend Isom or his pay package. He is grossly overpaid and incompetent. But AA flight attendants are the worst among the major airlines, lazy, unfriendly and disinterested in providing good quality service. It was true before 2019 and will most likely be true after a new contract. It’s delusional to think you should get best in class pay for worst in class performance.
And by the way, your bad attitude is driving away customers and reducing job opportunities for your own people
I’m starting to like Robert Isom more and more.
When was the last time an airline CEO was willing to say the truth and lay out the facts?
SWA is incredibly unique for an airline and their employees are very productive. It’s no surprise they look like they get paid more (even they are actually aren’t).
No one is getting retro pay and you are lucking you don’t get paid in AAdvantage miles.
@Johnny.
The majority of our FA’s are hard working good people . Who take care of our customers and are proud of the job we do . Like any other company . We do have a few bad apples . Pleas do not let that define AA FA’s over all . Hope to have you on a flight one day to show you the great service we do provide . Safe Travels !
@Kevin,
Are AA flight attendants willing to perform to the level of productivity that Southwests do? Meaning cleaning airplanes, managing beverage services on flights as short as 30 minutes (heck, I was on a 19 minute wheels up to down flight on WN a couple weeks ago where we had a choice of drinks), more flexibility and willingness to step in and board flights waiting for colleagues to show up, manage carry-on bags to eliminate the need to gate check (that would be a HUGE customer service point for AA) by doing things like actually being involved and moving bags around?
I have no doubt that you provide outstanding service (assuming you’re the same AA F/A who posts their great services on certain social media groups – you are a shining example of someone who cares and that is appreciated). Unfortunately these days flying American weekly (not by choice) is a great disappointment. I would be all for tremendous raises for flight attendants… if they could be merit based! But, the union would never go for that… Make pursers members of management again, rate crews based on customer feedback and observations and performance metrics, and while allowing some longevity based increases, put the best part of it on merit (oh, Southwest does this with supervisors in the airports).
The contents of a union contract are very complicated, especially when it comes to flight crew. I know cause I was a F/A, and am married to an airline pilot. More than 4 years without a contract is inexcusable! Especially during a time of high inflation, and when several contracts have been signed in the last year, or so by other airlines/unions.
What saddens me is the willingness of the more senior F/As and union management to throw the junior F/As rights/compensation under the bus! When AA/US Air got approval of the merger, AA got 10 times, or more, the bonus compensation for their approval than US Air employees (at least pilots did) – SHAME!!!! How about taking care of ALL UNION MEMBERS???? After all, they ALL pay union dues…. When UAW went on strike last year, they wanted ALL members to receive the same compensation package. They fought to get rid of the “tier” system that was in place from previous negotiations. Unions are supposed to be “together/for each other.” Just think of the meaning of the word “UNION.”
It does not seem that there truly is a union of all members, based on this article. Union management needs to ask themselves “why are we leaving junior union members hanging by a thread? Would I want that if I was one of them?????”
@NedsKid, you’re talking to F/As that used to do beverage services on DC-10s between AUS-DFW with your choice of drinks and F/As that setup galleys for 3 meal services on 13+ hour flights. I’m not sure where you’re getting we aren’t as productive as Southwest. I have good friends that fly for Southwest. They are productive on their 737s. It would be nice to have their recurrent training. Mine consists of 4 different airplanes and all the configurations of each one so we’re talking a minimum of about 10 aircraft types. I also don’t recall when we (Pursers) were part of the management team. I’ve been flying 40+ years. Maybe it was before my time.
Johnny, as far as driving people away, I’m really not seeing that. Our planes are packed. Surely if you’re flying on a weekly basis you see it also.
Christina, you need to keep up on negotiations a little better. Many senior F/As are willing to vote no on a contract that keeps junior F/As off straight reserve for years. I’m not sure what you’re talking about when you say we’re willing to throw them under the bus. We’re trying to keep them in the bus, not under it. Log in and read. As I prepare to retire, I want to leave my job intact for the next group and even better instead of worse.
“Raise your hand if you did not get a raise in the past 5 years”. Did anybody raise their hands in the room? As a social security recipient I received a increase each of the past 5 years. With inflation continuing and Isoms 31 million dollar ($31,000,000.00) 2023 income AA needs to increase the flight attendant wages.
During my mother’s 25 yrs with American her pensions were stolen twice , she was furloughed , and subject to physical strenuous work conditions which I don’t recall being in the job description of her original position as reservationist .
Don’t worry about what DL and Southwest are doing. Nor should you worry about the CEOs pay. Focus on you and your loved ones and thank you for your hard work. Any disruption in airline operations and this is all a mute point. If there was a strike , the CEO stopped crunching numbers , a disaster , or anything in between you can be out of a job anyways.
Envy is such a noble emotion.
When the guy at the top is defending his $31,000,000. and those at the bottom of the workforce are living on food stamps, there is a huge problem. Take care of the little guy at the bottom and they will take care of the Customers, which in turn will increase your Company’s bottom line making your Shareholders happy. What a concept.
When Airlines such as AA and WN post losses, again there is a huge problem. In this day and age, there is no reason acceptable for the losses or the food stamps. Five years without a contract is absolutely unacceptable. CEO’s need to be held accountable for these things instead of rewarded with huge paychecks. Maybe they should feel a little slip in the paycheck too. Excuses don’t fly in the face of poor management and poor planning.
Happy employees = Happy Customers
I’m always torn between hilarity and outrage when “news” outlets quote anybody from AFA-CWA who squeals about “striking”.
These media give silly women like Sara Nelson a forum to spew nonsense in an effort to get more eyeballs on screens.
There is no way on God’s Green Earth the flight attendants, or any other airline union, is going on strike because that would require a sign-off by the president and the chances of that happening are the smallest number you can think of.
So Nelson and her minions get the ignorant rank and file all worked up, creating a false sense of power.
What Nelson, et. al. does do, is create a permanent hostility within the employee ranks. When pilots or flight attendants create “CHAOS” (“Create Havoc Around Our System), the people who bear the pain of that are the gate agents, the reservations agents, and the passengers, few of whom, are thrilled to have their travel plans destroyed in the name of labor solidarity.
United Airlines’ work force never recovered from the last industry strike when the pilots walked off in the ’80’s. The culture of distrust between those that benefited and those that paid became permanently embedded.
@Gary. Maybe you can play back John Sameulsen ( President TWU) and Isom town hall meeting at LGA a few years back. This is starting to sound very similar. Why don”t Isom just settle this contract (after 5 years) before it gets ugly.
I really wish the Airline unions would take a page from their foreign counterparts and have a flat not seniority based pay system. I hate US unions for exasperbating inequality.
American has tried time and time again to not annoy the unions (bc happier employees lead to better service) but they are toxic and militant. They hated Crandall, they hated Carty, they hated Arpey, they didn’t give Horton a chance and overthrew him, and they eventually hated Parker and now Isom.
AA can try and have tried but the truth is that employees will remain surly and provide crappier service if the current situation persists. Either say enough is enough and start discipling unionised employees and/or lock them out. Thankfully Isom can stand his ground and I hope APFA stops dragging out negeotiations..
Full planes don’t mean you’re not driving away customers. AA’s yield management is state of the art so the planes are going to go out full. But a tremendous amount of revenue is being left on the table by driving people like me, who are willing to pay more, if the value is there.
If you provide great service. Thank You!
It makes me laugh when i read a reply so full of hogwash It makes me think of a tsunami. ” talking on their phone for hours” . boarding takes 45 minutes. Not hours. No pre departure drinks? Were they catered yet? Is your need for alcohol that desperate? Then simply the political statement. Enough said ,the author is entitled ,and the rest of the description would be deleted.
Sorry, industry leading pay should mean industry leading service, and that is something that hasn’t been seen at American in a very long time. Don’t get me wrong, Isom shouldn’t be making what he is either. A legacy airline fighting in the rankings with the bottom of the barrel should mean new leadership altogether. But at least DL and WN FA’s actually bring a market differentiator to the table, AA FA’s are more interested in doing everything else but their job. I can’t tell you how many flights I’ve taken and the service was awful and find the crew in the back galley or in the last row of seats reading.
@ BenG…..what a pompous ass. I hope they create CHAOS and your ass is sitting at a window seat in the terminal!
@pilot93434 Flight Attendants don’t want your job or pay. Flight Attendants don’t doze for dollars across the ponds. They work hard for the shit pay they get. If a decent salary were made by the FA’s, they would be happy, unlike the Pilots that are still whining after the engines stop at the gate. NOTHING makes a Pilot happy except his own God Complex, and happy hour.
@GoForRide BRING ON THE CHAOS! Enjoy your ride to the airport and back.
@Christine apparently you know nothing of American Airlines negotiations. The new hires and Juniors are too quick to settle and not look to the future. Instant Gratification is all they see. The Senior Flight Attendants are looking out for not only the themselves, but the Junior FA’S as well. Sadly the company has stripped so much from every employee over the years. The Flight Attendants will not give anything else up. They screwed the FA’s in so many ways to Sunday. Once you give something up? You NEVER GET IT BACK. Seniors are fighting for everyone’s future, because those fighting? Hope to be out over the next 10 years, leaving a better contract for the future.
What other airline has 2 bases having EVERY FA sit reserve 2-3 months a year? It doesn’t matter if you have flown for 60 years. PHX and LAX have been thrown under the bus. NOT the Junior Flight Attendants. Unless it is changed? That is the future of all Flight Attendants.
How dare you say the Juniors are being thrown under the bus. A better contract for all now and in the future is what is important.
I find it absurd to think FAs need significant financial resources to weather a strike. It takes one day of a strike to bring the entire operation to a hault. Millions of stranded passengers, tens of millions in lost revenue. A simple 3 hour delay can mess up 4-5 flights the rest of the day. An entire day with no operating flights send the airline scrambling for weeks. Once a strike is authorized, FAs have complete negotiating power.
@Jacob – The idea that an airline strike just gets workers what they want doesn’t seem consistent with history.
British Airways flight attendants struck 22 days across 3 months of 2010 and the airline, in effect, broke the union.
The IAM strike at Eastern Airlines essentially lasted March 1989 – January 1991, and instead of getting the concessions they were looking for the airline ceased operations.
Many AMFA members at Northwest never wound up returning to their jobs after the 1998 strike.
Remember that President Clinton ordered striking American Airlines pilots back to work in 1999.
@Gary
The likelihood of strike approval from the mediation board is another issue entirely. Knowing the essential function the “big 4” airlines play to the economy, I find it hard to imagine any neutral party authorizing a complete shutdown. Strikes were authorized previously I imagine because competition allowed for it. Merging post 9/11 made the airlines as they are now indispensable.
My only point is that *IF* a strike were authorized the financial burden on the airline is much greater than on any individual FA. I imagine the average FA can go a week or two without pay ( they only work on average 80 hours a month anyway) can American survive a week (plus weeks of reverberations) without revenue? Can United? What about the lasting impact of damage to the brand?They are leveraged to the tilt as it is with razor thin margins.
@ Gary
Quick math – averaging American’s yearly revenue of 54 billion gets you to about 145 million per day. At what point does it become cheaper to match SW’s pay structure than to prolong a strike? If the Union is asking for 1 billion more in compensation you’re looking at about 8 days. I imagine FAs can last that long. In fact, much longer.
The Delta line about 8% for boarding pay is misleading at best. Most i know are well below that. Delta’s math is always fuzzy. Their attempt at showing parity is bs, since the SWA pay is guaranteed for all while boarding pay depends on how many departures you have. So if you fly a lot of international flights, that’s less than domestic flights with 4 legs a day.
The point is, saying 4 +5 +5 +8 (2022, 23, 24 and boarding pay) equals the same 22% swa got is very misleading.
It would have been better if US Airways, no, check that Piedmont was still in existence
Best east coast airline .
Aircraft always clean. Fares reasonable. Crew were pleasant.